MEMBERSHIP INSIGHT
expenses. Are these ‘air miles’ considered to be a reportable benefit? A: There will not be a reportable benefit provided that the air miles belong to the employee rather than the employer, and they are not considered as being provided by reason of the employment. This also includes if the goods or services giving rise to these air miles happen to be purchased as part of the employee’s business travel or using a credit card provided by the employer. Generally, in these circumstances there is no tax liability and the employer and the supplier of the air miles would not need to report this to HMRC, and the employee would not need to put them on a tax return. Where the air miles are provided by reason of the employment then there is a tax liability for the employee, which would occur where the employer bought the air miles to be distributed to employee. In this event, they would need to be reported in a P11D return. HMRC provide guidance on this subject in its Employment Income Manual at https://goo.gl/F4hh66. Q: We have a client who is a paid director. She is the only person on the payroll and has not been working continuously. She has recently given birth. Should we pay her SMP if she provides a MATB1 notice and meets all the qualifying conditions? A: If she meets all the following qualifying conditions she will be entitled to SMP: ● she must earn an average of at least £113 a week ● has worked for the employer continuously for at least 26 weeks up to the qualifying week (i.e. the fifteenth week before the expected week of childbirth) ● gives the correct notice, and ● provides proof of pregnancy (e.g. MATB1 notice). Also, the employee has up to the thirteenth week of the maternity payment period in which to claim SMP, if there is an acceptable reason for the delay. Q: We have received some payment claims that may be subject to the IR35 off-payroll working legislation. It is clear from the invoices that some of the work has been carried out over several months. Should Class 1 NICs be calculated over a number of pay periods which reflect when the work was carried out?
Advisory Service is available 9a.m. to 5p.m. Mondays to Thursdays, and 9a.m.
to 4.30p.m. on Fridays. It is free to all CIPP members * , students and attendees of approved CIPP courses and conferences in the last six months. Call 0121 712 1099 , email advisory.service@cipp.org.uk or visit cipp.org.uk for frequently asked questions.
Advisory
*please see summary at cippmembership.org.uk for details.
Q: An employee handed in her MATB1 notice to the human resources (HR) team when she was 25-weeks’ pregnant, and has requested to take statutory maternity leave (SML). Though the employee was informed by HR that she was entitled to statutory maternity pay (SMP) it was discovered at the last minute that her average weekly earnings were below the lower earnings level (LEL) for Class 1 National Insurance contributions (NICs) and therefore she was not entitled. We issued a form SMP1 at the start of the SML period. Was this the correct procedure? A: The correct procedure in this situation is that the employer should issue the SMP1 form – which is used to inform employees that they are not entitled to SMP – within seven days of the request for SMP and SML. This will ensure that an employee has enough time to apply for maternity allowance (MA) from the Department for Work and Pensions (DWP), and for this to be paid immediately when the employee starts her SML. A delay in sending form SMP1 to the employee could mean that she may not receive the full 39 weeks of MA she is entitled to. HM Revenue & Customs (HMRC) provide guidance in the Employment Income Manual (https:// goo.gl/exXvHw) and this explains that the SMP1 form and the MATB1 notice should be returned promptly to the employee if she does not qualify; failure to do so could result in a penalty up to a maximum of £3,000.
Q: We have a scenario where an employee is requesting to take statutory adoption pay and leave (SAP, SAL) for a child that he adopted in January 2017, and the adoption was from abroad. The employee has requested to start SAP and SAL in October 2017. Is the employee able to do this? A: When adopting a child from abroad an employee has only twenty-eight days from the time the child enters the United Kingdom to take SAP and SAL. In this case, the employee cannot have the SAL or SAP and the employer will need to issue to the employee a form SAP1 which informs him that the employer cannot pay SAP. Q: Our situation is that an employee was not entitled to SMP but was entitled to MA. What is the position regarding keeping in touch (KIT) days? A: I can confirm that where an employee is not entitled to SMP but is entitled to MA instead she can work up to ten KIT days and this would not affect her MA she receives from the DWP/Jobcentreplus. She should inform the DWP/Jobcentreplus when she works any KIT days; and if exceeding the ten KIT days she will lose some MA. The employee and employer should agree the rate of pay that she will be paid for the work carried out on these KIT days, The employer should pay at least the appropriate national minimum/living wage for working a KIT day. Q: Recently within our business an employee has gained ‘air miles’ from the reimbursement of business
| Professional in Payroll, Pensions and Reward | October 2017 | Issue 34 6
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